Address by Minister Van Loan to Economic Club of Canada

No. 2010/22 - Toronto, Ontario - April 30, 2010

Check Against Delivery

Opening Markets Across the Atlantic: The Next Step in Canadian Free Trade

It’s a great pleasure to be here today to talk about what our government is doing to create new trade opportunities in markets around the world, including Europe. In particular, I want to talk about our trade negotiations with the European Union—now finishing their third round of talks.

When we talk about free trade and expanding markets, we do so because opening doors to trade is in the best interest of Canadians. And it’s in our best interest because Canada’s business community—firms and investors like the ones you represent—is the engine that drives our economy.

When our businesses succeed, Canadians succeed—through jobs, prosperity and the quality of life upon which we all depend.

Our government believes that Canadian firms and Canadian workers can compete with the best the world has to offer, if we give them the tools and access they need to do it.

History tells us as much. For example, since it came into force, the North American Free Trade Agreement has doubled our trade with the United States and tripled our trade with Mexico. In that same time, nearly 4.1 million Canadian jobs have been created.

Thousands of Canadian companies took advantage of the opportunities created by this free trade agreement and reached out to American and Mexican partners. Deal by deal, sale by sale, their success became Canada’s success. They proved that a policy of open and free trade with our partners can work to Canada’s advantage. They also proved that free trade is not an abstraction, but an approach to trade that draws direct, concrete benefits to communities and people, creating jobs, opportunity and prosperity.

But as we reap the benefits of continental free trade, the Government of Canada needs to create additional opportunities for Canadians to benefit—beyond North America.

Expanding markets

In addition to lowering taxes, investing in innovation and creating a free enterprise environment on many fronts, our government is expanding market opportunities to help Canada’s economy down the path to a lasting recovery.

We’re moving legislation forward in Parliament to implement our free trade agreements with Colombia and Jordan. And we’ll soon introduce legislation for a similar agreement with Panama. These agreements hold a lot of potential for key Canadian sectors from agriculture to manufacturing, financial services and beyond.

We’ve also worked to reinforce our advantages here in North America.

As you know, the “Buy American” provisions in the U.S. stimulus plan presented a serious challenge. Working together with the United States, and with the full support of Canada’s provinces, territories and business community, we were able to negotiate a waiver of these provisions and secure deeper access to markets in both our countries.

And as I speak, we’re now writing the next chapter in the Canadian trade story: the most significant trade negotiations since the ones for the North American Free Trade Agreement.

Toward a Canada-EU comprehensive economic and trade agreement

Canadian businesses have long called for closer ties to Europe. They’re excited about the European Union’s position as the world’s largest single common market and biggest investor, as home to a third of the world’s largest companies, and as an incubator of innovative ideas and technologies.

In many ways, free trade with the European Union is the logical next step in our commercial relationship. Over the years, the European Union has become Canada’s second-largest trade and investment partner in the world, surpassed only by the United States.

In sectors as diverse as agriculture, transportation, banking, high technology and others, jobs and prosperity in both Canada and Europe are directly supported by our close relationship.

As NAFTA did with our partnerships in North America, a new agreement with the EU would take our partnerships there to a whole new level. We also predict a boost to Canada’s economy of $12 billion annually.

This is a clear opportunity for Canada. Sectors like agriculture, transportation, banking, high technology and many others all stand to benefit from preferential access to the European Union and greater transatlantic trade.

European businesses are excited, too. We’re seeing a lot of interest in Canada’s economic stability, our commitment to innovation, our position in the North American marketplace, and, certainly, the excellence of our private sector as represented by people like you.

Canada has:

  • an open and attractive business environment;
  • the strongest fiscal position in the G7, with the lowest ratio of debt to gross domestic product;
  • the soundest banking system in the world;
  • the highest predicted economic growth in the G7;
  • low corporate taxes—on track to being the lowest in the G7;
  • a skilled workforce with the highest proportion of post-secondary graduates among countries of the Organisation for Economic Co-operation and Development;
  • the best economy in which to invest for the next five years, as identified by the Economist Intelligence Unit.
  • a strong commitment to the rule of law; and
  • a high quality of life, with safe streets, political stability and a beautiful natural environment.

KPMG [LLP, the accounting and consulting firm] also confirmed last month that, among industrialized countries, Canada is ahead of the pack in terms of cost-competitiveness. In fact, we enjoy a 5-percent advantage over our American partners in the cost of doing business.

So both Canada and Europe see the great potential of a closer partnership. That’s why we’re moving so quickly on negotiations. The third round of the negotiations is continuing in Ottawa right now. Not even a volcano eruption could prevent our government from working toward this ambitious agreement. And a fourth negotiating round will take place in Brussels in July. I’ve been very clear that I want these negotiations completed as soon as possible.

We’re looking at a range of issues, including:

  • breaking down tariffs and non-tariff barriers to trade in goods and services;
  • enhancing investment relations;
  • cooperating on issues like science and technology; and
  • aligning our regulations to ensure the smooth, efficient flow of trade across the Atlantic.

This is the first time the European Union has ever negotiated such a trade deal with a developed country. It is Canada’s first time with the provinces and territories at the table. And we’re working closely with the provinces and territories throughout the process, given their stake in the outcome.

I’ll be taking every opportunity over the coming months, including my visit to Europe next week, to advance these negotiations.

But I need your help, too.

Let those involved know how important this agreement is to you. If you want this agreement to go ahead, tell the provincial government. If you want it to be an ambitious agreement, let [Ontario] Premier Dalton McGuinty know. If you want the Canada-EU trade agreement to happen soon, tell the Ontario Ministry of Economic Development and Trade. The provinces need to know that this is important to you. They are at the table.

Conclusion: Making the case

In fact, we’re going to need everyone who believes in opening doors to global opportunities to get behind our efforts, ensure that Canadians understand the importance of free trade to our economy, and work with us to help create new jobs and prosperity across our country. Because as these negotiations move forward, we’re hearing voices from the fringe opposing—once again—our efforts to create jobs and opportunities for Canadians through freer and more open trade.

For those of us who remember the debate over North American free trade, this is a serious case of déjà vu.

While most Canadians are generally in favour of freer trade and understand the clear link between economic recovery and expanding market access, this vocal minority is raising the same tired, disproven rhetoric about how free trade somehow erodes our sovereignty, or that Canada is giving up a lot for little in return.

Free trade requires informed discussion, not scare tactics.

History has shown the great benefits of North American free trade to Canada. And let’s not forget that one of the reasons Europe—not to mention China, India and so many others—wants to do business with us is, precisely, our North American advantage.

As our negotiations with the European Union move forward, we need to promote the benefits of that North American advantage at every opportunity.

We also need to remind Canadians that, like all of our trade agreements, an agreement with the European Union would exclude public services such as health, education and social services. It would also have no effect on the ability of governments at all levels to regulate in the public interest, or our ability to provide water services.

What we do expect are benefits—benefits similar to, and possibly greater than, what we’ve seen with North American free trade: more jobs, new sources of prosperity and a strong, globally competitive economy. An agreement with the European Union is an incredible opportunity at a critical time in our economic history.

Let’s get behind it. And let’s work together to convince Canadians of the enormous benefits of opening new markets across the Atlantic—and, indeed, around the world.

Thank you.